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Largest economic incentive deals of Q2 2015

by Kelley Rendziperis, on Jul 27, 2015 12:38:00 PM

Economic incentives continue to play an important role when companies are looking to open new sites or expand their existing facilities. The capital invested and jobs created during these expansions will often make companies eligible to receive valuable economic incentives such as tax abatements, tax credits, cash grants, training grants, infrastructure grants and other incentives offered by economic development organizations. To help understand economic incentive trends in the site selection process, Site Selection Group has evaluated economic incentive packages awarded to companies across the United States during the second quarter of 2015

More than $1.32 billion in economic incentives awarded

At the time of this article, Site Selection Group identified 527 projects that were offered economic incentive packages in the United States during the second quarter of 2015. These economic incentive packages represent an estimated total incentives value in excess of $1.32 billion. To generate these economic incentives, companies are expected to spend more than $27 billion of capital and generate more than 92,000 new jobs representing a return on investment of approximately 4.7%. The incentives add up to an award of over $14,200 per new job, and an average deal value of approximately $2.5 million.  While the average deal value is $2.5 million, the vast majority of projects, 70 percent, are granted an incentive package of less than $1 million and 83 percent are granted less than the average $2.5 million package.

The following chart depicts the 527 deals broken out by incentives values:

Number-of-Deals-by-Incentive-Value-PS-v1

 

Top 25 economic incentive packages offered in Q2

The following table identifies some of the largest economic incentive deals offered in the second quarter of 2015. These projects provide a great way to benchmark what types of economic incentives exist for a variety of project types. However, it is important to understand the values are estimates and typically only reflective of state-level incentives.

                                             
Company Name
Location
Incentive Value ($M)
Capex ($M)
Jobs Created
Industry Function
Volkswagen
Chattanooga, TN
$166.00
$704.00
9,800
Manufacturing
Polaris Industries
Huntsville, AL
$80.00
$172.00
2,000
Manufacturing
Volvo Cars
Ridgeville, SC
$74.00
$500.00
2,000
Manufacturing
Seldat
Piscataway, NJ
$51.50
$0.00
1,050
Distribution Ctr.
Giti Tire
Richburg, SC
$40.00
$560.00
1,700
Manufacturing
Audible.com
Newark, NJ
$39.38
$56.70
350
IT Support Center
Praxair
Danbury, CT
$36.00
$65.00
0
Headquarters
New York Life
Jersey City, NJ
$33.90
$0.00
300
Business Services
General Motors
Arlington, TX
$28.70
$1,290.00
589
Manufacturing
General Motors
Fort Wayne, IN
$25.10
$1,200.00
0
Manufacturing
Brown Brothers Harriman
Jersey City, NJ
$19.40
$0.00
110
Business Services
Google
Council Bluffs, IA
$16.80
$1,000.00
70
Call Center
Fidelity
Jersey City, NJ
$16.50
$8.80
200
Business Services
LMT Mercer Group
Trenton, NJ
$15.54
$19.25
60
Manufacturing
Tesla Motors
Multiple locations, CA
$15.00
$2,390.00
4,426
Manufacturing
Metal Container Corp.
Jacksonville, FL
$14.85
$170.00
75
Manufacturing
United Airlines
Denver, CO
$13.20
$40.00
200
Shared Service Ctr.
Steel Dynamics
Columbus, MS
$12.00
$100.00
40
Manufacturing
Impax Laboratories
Multiple locations, NJ
$11.48
$17.50
50
Manufacturing
Procter & Gamble
Bear River City, UT
$11.15
$450.00
200
Manufacturing
Northrop Grumman
Multiple locations, CA
$10.00
$520.00
1,359
Manufacturing
Shintech
Plaquemine, LA
$10.00
$1,400.00
100
Manufacturing
Ferrous CAL
Gibraltar, MI
$9.90
$53.00
100
Manufacturing
Samsung Semiconductor
San Jose, CA
$9.00
$194.70
327
R&D
Gestamp
Chattanooga, TN
$8.50
$180.00
500
Manufacturing

For comparison purposes, there were four larger projects, United Technologies (CT), JPMorgan Chase (NJ), Sayreville Seaport Associates (NJ) and GD Copper (AL), which accounted for over $1 billion more in total incentives offered in the second quarter of 2014 than the same period this year.  However, the larger incentive packages seem to continue to be dominated by New Jersey’s Grow NJ Program.

For additional information about these projects and others, please contact Site Selection Group.

Source: ICA Incentives

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